Taiwan is investigating companies that worked with Chinese companies that reportedly supplied Huawei

Taipei/Hong Kong
CNN
—

Taiwan is investigating whether four of its companies violated US sanctions or its investment rules when they provided services to Chinese companies that are said to be helping Huawei build chip factories.

Emil Chang, the Ministry of Economic Affairs official in charge of reviewing investments, told CNN on Friday that an “administrative investigation” had begun this week into four Taiwanese companies mentioned in a media report.

He added that the investigation will focus on whether their business activities in China are consistent with the approvals granted to them by the ministry.

If any of them are found to have violated the rules, each company is subject to a maximum fine of NT$25 million (US$777,000).

Zhang added that the ministry will also look into whether the companies – Topco Scientific, United Integrated Services, L&K Engineering Co and Cica-Huntek Chemical Technology – have violated any US sanctions.

The four companies deny any wrongdoing. In separate statements, they said they were only involved in wastewater management, interior decoration or construction work approved by Taiwan, and did not provide semiconductor materials or equipment.

In recent years, Huawei has become a symbol of the technological competition between the United States and China. Washington and its allies in Europe and Asia have sought to restrict its access to advanced chips and chip-making technology over concerns that the telecom company is spying for the Chinese government.

Huawei has always denied these allegations. It did not respond to CNN’s request for comment.

The company was previously the world’s second-largest smartphone maker and is trying to make a comeback after being hit by US export restrictions, which were first imposed in 2019.

Several Taiwanese companies, including chip giant TSMC and Apple supplier Foxconn, operate in China and are closely integrated into their supply chains. However, the island’s government closely monitors what its companies do and does not allow the latest technology to be produced there.

On Wednesday, a lawmaker asked Taiwan’s Economic Affairs Minister Wang Mei-hua About the Bloomberg report The four companies provided services to help Huawei build the infrastructure for a network of chip manufacturing factories in China.

Wang responded by saying that the four companies appeared to have provided Huawei with “wastewater treatment and environmental protection equipment” for its factories, which she said was ostensibly different from critical technologies identified by the Taiwan government that could affect national security.

For many years, Taiwanese companies have walked a fine line between exploiting China’s business opportunities and avoiding potential violations of export controls, especially since Beijing has done so. Speeding up Military pressure on the island.

Cross-Strait relations are a major issue in Taiwan Presidential electionwhich is scheduled for January.

China remains Taiwan’s largest trading partner. But China’s ruling Communist Party considers Taiwan, with a population of 24 million people, to be its territory – even though it has never controlled it. It has long vowed to “reunify” Taiwan with mainland China, by force if necessary.